March 15, 2012

Fugitives Denied Tax Records By Ninth Circuit

The Ninth Circuit Court of Appeals has affirmed a district court decision that denied records made on behalf of two U.S. citizens who have fled to China instead of defending themselves against criminal charges filed by the IRS. The case concerns Steven and Linda Su Cheung who the IRS filed a criminal complaint against. Rather than defend themselves, they fled to what the U.S. government believes is China -- a country the U.S. doesn't have an extradition treaty with. The Cheungs than had their attorney file a FOIA request for the records the IRS has. The IRS denied the records, and a lawsuit followed.

The case proceeded through the courts, and the 9th Circuit affirmed the district court's finding that the release of the documents are exempt pursuant to FOIA Exemptions 3 and 7(A). The reason for the withholding is largely the fact that rather than stay and defend themselves the Cheungs fled and then tried to use the FOIA to find out what the government had on them. The two exemptions were used to prevent this from happening. As the court stated, if the Cheungs had stayed and fought the charges, they'd get the information in the documents through either criminal discovery and then FOIA.